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Why Is it So Hard to Rationalize the Budgetary Process? A Behavioral Analysis of Performance-Based Budgeting

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Since the mid-twentieth Century, several efforts have been made to rationalize the government budgetary decision making process. Most of these efforts were either incomplete or a failure. This paper provides a behavioral analysis of why it is so hard to rationalize the budgetary decision making process, taking performance-based budgeting (PBB) as an example of a budget innovation that has been proposed for more than 50 years to rationalize the budget process by linking allocations to performance results without being fully implemented. This paper looks at the rationalization of the budgetary process from the lens of non-linear systems models, and analyzes the forces/elements that have made this rationalization an objective hard to attain, emphasizing the policy-making and implementation gap with regard to performance-based budgeting.